Swiss to Reinstate Fixed Book Prices

The debate over fixed book pricing remains a complicated and volatile one in Europe.

By Amanda DeMarco

On March 18 the Swiss parliament approved a fixed price system for books in German-speaking Switzerland, both for online and in-store sales as of next year. The debate over fixed book pricing is a complicated and volatile one in Europe. Various degrees of price control exist side by side, and countries vacillate on the legality and benefit of fixed price systems. In Germany all books, including e-books and books sold as apps, are included in the fixed price system. French law excludes books that don’t closely correspond to a printed edition (apps), as well as foreign buyers and sellers. Britain hasn’t had fixed book pricing since the Net Book Agreement was declared illegal in 1997.

Since the 2007 repeal of the fixed price system in German-speaking Switzerland, publishers there have been fighting to reintroduce it. Various proposals have excluded online sales, which would have been catastrophic for physical stores. The issue finally came to a head earlier this year, when both houses of Swiss parliament separately approved a fixed price system for both in-store and online book sales, requiring Friday’s final vote for ratification.

Lack of Price Control Caused Problems for Bricks-and-mortar Bookstores

Swiss publishing professionals often compare the effects of the repeal of fixed book pricing to those of the abolition of the Net Book Agreement in Britain: price wars over bestsellers, deep discounts of up to 30% by big booksellers like Thalia and Orell Füssli. Andreas Grob, Managing Director of Buchzentrum, a large distributor and wholesaler owned collectively by Swiss bookstores, has witnessed online sellers benefit while physical stores have experienced “ever-increasing problems.”

In Germany, where fixed book price law is strong, book prices have actually fallen in comparison with other goods over the past decade. Swiss book prices, in contrast, have risen over the past four years. “Economic theories say that free markets produce lower prices, but interestingly in the case of books that’s not so,” commented Dani Landolf, director of The Swiss Publishers Association (SBVV).

While bestsellers get deep discounts, the majority of other books become more expensive to fund the price wars. Sabine Dörlemann, president of Swiss Independent Publishers (SWIPS), expressed frustration that books from small publishers with tight budgets were assigned higher prices, which reduces sales though the publisher sees none of that extra money.

Some price relief has occurred in the past six months due to the weakening of the Euro in comparison with the Swiss Franc; imported books are now cheaper. Disregarding the effect of the currency though, the book price trend remains clearly upward. Many small bookstores have also closed in recent years, in part due to the financial crisis, but also because they cannot compete with large retailers’ discounts.

Had the bill not passed, said Landolf, the price competition would have “really intensified here in Switzerland,” which seemed quite possible in the weeks leading up to the vote; no one interviewed for this article felt they could confidently predict its outcome.

Publishers: Pleased but Disoriented

The long struggle for reintroduction and the uncertainty that prevailed up to the last minute now leaves many Swiss publishers pleased but disoriented. “Many people no longer really believed that it would come so far, ourselves included,” said Landolf. “That’s why basically no one is prepared to say specifically what the situation will be like when fixed prices are reinstated.” Luckily, the Swiss market is relatively small, the experience of fixed pricing lies not so far in the past, and publishers and booksellers have until 2012 to get things sorted out.

The March 18 vote actually wasn’t as close as many had anticipated; 23 to 19 in the Ständerat (Council of States) with one abstention, and 96 to 86 in the Nationalrat (National Council) with 5 abstentions, according to the Neue Zürcher Zeitung.

The decision affirms the idea that books are not just like any other consumer product; their diversity and availability is desirable and demands protection. To have a variety of books, a variety of publishers is necessary; a large number of independent bookstores willing to stock titles from small and large presses alike is necessary for such a variety of publishers to thrive; and a fixed price system is needed to protect those bookstores, publishers, and ultimately authors. Or so the reasoning goes. For SWIPS, in the end the decision means that “more money ends up with us,” said Dörlemann.

Critics of the decision claim that internet book sales are too difficult to regulate. However, such sales are successfully regulated in Germany and Austria, and since an address is always required to ship a book, international sellers can always tell when they are selling to a fixed-price territory.

Other critics worry that implementing fixed prices will require a large bureaucracy, but SBVV promises that it will ensure that booksellers stick to the rules. It’s “a private commercial solution,” assured Landolf. “We just have to keep our eyes open and make sure that online sellers who don’t keep to these prices are brought before a court. Of course, we hope they’ll just keep to the prices.”

Some members of parliament claimed that a fixed price system would simply make books more expensive with little cultural benefit. “That goes to show how ill-informed our parliament can be on this issue,” responded Grob. The large online bookstore Ex Libris is also a loud critic. But it’s true, someone who buys only bestsellers will pay more, potentially 30 percent more, next year.

A referendum to overturn the fixed price ruling has already been launched by various political parties under the slogan, “No to expensive books.” Whether the movement will gather enough signatures to come to a vote remains to be seen, but for now Swiss publishers are enjoying their moment of victory.